Fare Capping: Balancing Revenue and Equity Impacts (2022)

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16 Transit Agency Survey This chapter presents the results of an online survey of transit agencies conducted in March 2021. The chapter summarizes the data collection procedure, reviews the agencies surveyed, and presents the survey results by topic. Survey Data Collection Procedure Survey Sampling and Data Collection The synthesis team developed a list of transit agencies that have implemented or considered fare capping based on the literature review, online searches, and suggestions from the TCRP panel. Transit agencies surveyed were limited to those that met the following criteria: • The agency or operator is in the United States or Canada; • The agency has studied or implemented fare capping; and • For multiple agencies within a region that have a shared fare capping agreement (such as TriMet, C-TRAN, and Portland Streetcar), each agency was contacted separately because agencies could have different approaches and experiences. The survey was sent in March 2021 to 50 transit agencies in North America and was open for 1 month. Of the agencies contacted, 45 (90%) responses were received, and after data cleaning, 38 (76%) unique and usable surveys from 35 agencies were used for the data analysis. A few agencies had explored fare capping but had decided not to implement early in the planning process, and others were no longer charging fares and therefore did not consider themselves to be fare capping agencies. The survey was conducted during the COVID-19 pandemic, which changed many transit agency fare structures because several agencies went fare-free to reduce interactions between passengers and operators. This affected many agencies’ ability to evaluate fare capping. Survey Instrument The survey instrument was developed in an iterative process with the TCRP panel. The final version of the survey questionnaire is available in Appendix A. The survey was organized by topic as follows: 1. Agency information; 2. Fare capping definition and status; 3. Motivations for pursuing fare capping; 4. Decision-making framework; 5. Customer engagement and education; C H A P T E R 3

Transit Agency Survey 17   6. Measuring impact on ridership, revenue, and fare collection costs; 7. Technology and innovation; 8. Impacts to pass structure and pricing; and 9. Final thoughts. The survey used skip logic in the first section, based on the respondent’s answer to a question asking if they had implemented fare capping or not. Respondents that had studied fare capping but had not yet implemented fare capping were only asked the questions in Sections 1 to 5 and Section 9. Characteristics of Responding Agencies The survey results are from 38 respondents at 35 agencies representing 19 states and two Canadian provinces, listed in Table 2. Most of the respondents (26, or 68%) have fully or partially (e.g., piloting) implemented fare capping. Of the 11 agencies surveyed that have not implemented fare capping, six have completed planning and experienced COVID-19 pandemic- related delays to implementation, and five have only considered, or not yet completed, planning. Of agencies surveyed, 44% participate in a fare system with multiple transit agencies. Of those multi-agency respondents, 67% have fare capping and another 17% are planning to add it in the future. General Information Transit Service Provided by the Agency Status of Capping A ge nc y Lo ca ti on A nn ua l P as se ng er s Se rv ic e A re a Po pu la ti on H ea vy R ai l / C om m ut er R ai l Li gh t Ra il Bu s Bu s Ra pi d Tr an si t D em an d Re sp on se St re et ca r/ T ro lle y / M on or ai l Im pl em en te d Pl an ni ng o r Co ns id er in g Autorité régionale de transport métropolitain QC, Canada 570,000,000 4,000,000 X X X Biddeford Saco Old Orchard Beach Transit ME 366,527 203,914 X 2020 Bi-State Development/Metro MO 36,642,036 2,150,706 X X X 2014 C-TRAN WA 6,295,062 1,849,898 X X 2017 Champaign–Urbana Mass Transit District IL 11,620,837 145,361 X X 2020 Chicago Transit Authority IL 455,743,541 8,608,208 X X X CTtransit CT 15,797,582 924,859 X X 2018 Dallas Area Rapid Transit TX 69,301,548 5,121,892 X X X X X 2018 Edmonton Transit Service AB, Canada 86,715,540 981,280 X X 2021 GoTriangle NC 1,883,926 347,602 X X X Greater Dayton Regional Transit Authority OH 9,416,615 724,091 X X X 2021 Table 2. Summary of responding agencies and fare capping status. (continued on next page)

18 Fare Capping: Balancing Revenue and Equity Impacts General Information Transit Service Provided by the Agency Status of Capping A ge nc y Lo ca ti on A nn ua l P as se ng er s Se rv ic e A re a Po pu la ti on H ea vy R ai l / C om m ut er R ai l Li gh t Ra il Bu s Bu s Ra pi d Tr an si t D em an d Re sp on se St re et ca r/ T ro lle y / M on or ai l Im pl em en te d Pl an ni ng o r Co ns id er in g Piedmont Authority for Regional Transportation (PART) NC 686,982 311,810 X 2018 Pinellas Suncoast Transit Authority FL 13,615,634 2,441,770 X X X Portland Streetcar OR 96,633,005 4,491,363 X 2017 Regional Transportation Commission of Washoe County NV 7,863,626 392,141 X X 2020 Rhode Island Public Transit Authority RI 16,431,596 1,190,956 X X 2020 Rochester-Genesee Regional Transportation Authority NY 14,712,832 720,572 X X 2020 Rogue Valley Transportation District OR 1,232,952 154,081 X X X San Diego Metropolitan Transit System CA 85,357,495 2,956,746 X X X X San Joaquin RTD CA 3,664,728 370,583 X X 2020 Skagit Transit WA 896,118 62,966 X X 2020 Solano County Transit (SolTrans) CA 1,446,163 165,074 X X 2019 Transit Services of Frederick County MD 593,853 141,576 X X 2019 TriMet OR 96,633,005 1,849,898 X X X 2017 Utah Transit Authority UT 44,578,161 1,021,243 X X X X Valley Transportation Agency CA 36,432,963 1,664,496 X X X X Note: Empty cells indicate item was not applicable (N/A). Greater Portland Transit District ME 2,111,881 203,914 X 2020 HART–Hillsborough Regional Transit FL 13,107,600 2,441,770 X X X 2020 Hernando County Transit FL 153,428 148,220 X X X Indianapolis Public Transportation Corporation (dba IndyGo) IN 9,517,965 1,487,483 X X X X LA Metro CA 379,718,121 12,150,996 X X X X X X MARTA GA 117,759,054 4,515,419 X X X X X Metropolitan Transit Authority of Harris County, Texas (Houston METRO) TX 229,899 4,944,332 X X X Miami-Dade Transit FL 79,578,621 5,502,379 X X X X 2019 Niagara Frontier Transportation Authority NY 23,982,380 935,906 X X X X Table 2. (Continued).

Transit Agency Survey 19   Survey Results by Topic Scope of Fare Capping Programs Fare capping can be offered on all fare products or a limited number. Fare cap offerings of surveyed agencies are shown in Figure 1. Fare products here refer to the type of pass and not the fare payment media. A majority of agencies (55%) offer fare capping on a limited number of fare products, with another 34% offering it on all fare products, and 11% selecting other. All agencies offer fare capping on day passes, with 74% of those offering a cap on monthly passes as well. Only 25% offer fare capping on weekly passes. Transit riders who exceed a capping threshold receive free rides for the rest of the cap time period in all but three of the fare capping systems. Those three agencies instead offer discounts on trips after the threshold is met, rather than free trips. Fare capping is dependent on fare media that can track the number of rides or amount spent per transit user. Transit agencies use a range of fare media to enable fare capping; reloadable smart cards and mobile apps are the two most common methods of fare media that offer fare capping, with some agencies requiring reloadable smart cards to be registered. A handful of agencies offer fare capping through credit cards (open payment). One “other” category response included contactless EMV payment (credit card, debit card, or digital wallet). When asked about implementation, agencies revealed a variety of approaches. As shown in Figure 2, a plurality (43%) of agencies offers fare capping in parallel with an existing fare structure. Six agencies (17%) ended a previous fare structure when implementing. Only two agencies (6%) surveyed used a pilot program to test fare capping. Motivation and Decision-Making Framework Respondents were asked to rate their agency’s motivations for pursuing fare capping from low to high (see Figure 3). The highest rated motivation was to create a more equitable fare structure (92% of agencies) followed by enhancing rider experience and simplifying the fare system, which were identified by a majority of agencies (81% and 66%, respectively). When asked how they made the case for fare capping to decision makers, responses differed from their overall motivations slightly, with the business case (attract more riders, speed boarding times) receiving the most responses (21). Improving rider experience (simplify fares, 34% 55% 11% Full (all fare products) Partial (limited fare products) Other Figure 1. Scope of fare capping program (n = 38 responses).

20 Fare Capping: Balancing Revenue and Equity Impacts allow mobile payment) received 18 responses and providing a more equitable system received 17 responses. A majority of agencies (21) indicated it took less than 2 years to plan and implement fare capping, while the remaining agencies that had begun the process (14) took more than 2 years to plan and implement fare capping. Mitigating factors include staff capacity as well as the scale of the program. For example, some agencies provide fare capping through a mobile app, while others replaced all existing fare equipment and entered into third-party retail contracts. Asked to identify all methods of equity assessment used, a majority (58%) of agencies reported conducting at least a Title VI analysis to evaluate impacts of fare capping. Only a few agencies, however, did a focused equity analysis beyond a Title VI analysis or engaged linguistically diverse audiences for direct feedback. Agencies who selected “other” tended to evaluate fare capping as part of a larger effort, working with a consultant to develop a model and evaluate impacts, and perform internal modeling of fare changes. 0% 20% 40% 60% 80% 100% Create a more equitable fare structure Enhance rider experience Simplify fare system Reduce cost related to cash collection/legacy fare media Increase ridership Introduce mobile and online payment options Part of a fare restructuring effort Improve multimodal connections Percent of Responses M oti va tio n Ca te go ri es High Medium Low N/A 14% 17% 43% 20% 6% Complete implementation (offered fare capping on all fare media and categories) Full-scale (previous fare structure ended) Parallel implementation (fare capping media is in addition to existing media) Phased implementation (offered fare capping for one fare category and then expanded implementation) Pilot program (time limited) Figure 2. Fare capping implementation (n = 35 responses). Figure 3. Motivation for pursuing fare capping (n = 38 responses).

Transit Agency Survey 21   Slightly under half (47%) of all agencies did not engage external partners in the design and implementation of fare capping. The agencies that did engage external partners worked with many different types of partners, including community organizations, vendors, and human services agencies. Although only three agencies engaged a market research specialist, 13 agencies (34%) conducted market research, either on their own or with a non-specialist consultant. Agencies’ involvement of the general public in the planning and implementation of fare capping varied (see Figure 4). Four agencies did not respond to this question, with the remaining 34 involving the public at some point in the process. Agencies that answered “other” had not determined when to involve the public or were engaging the public through a pilot. Measuring Impacts To understand the impacts of fare capping, it is helpful to review how agencies promoted fare capping. Nearly every agency surveyed promoted fare capping, often in multiple ways (Figure 5). Some comments indicated that in their experience, explaining and promoting fare capping was the most important step in developing a fare capping program. Other tactics included pop-up events, bus cards, and special promotions to engage specific audiences and customer markets. The remaining survey analysis uses responses from 31 agencies, reflecting only those agen- cies that had implemented fare capping or were in the process of implementing fare capping. Agencies that had only planned fare capping to date were not asked these questions. Agencies used a variety of metrics to evaluate the impacts of fare capping, and most agencies collected and analyzed multiple types of data. The most popular metrics used were passenger trips, operational data, and trips per passenger. Rider surveys and fare box recovery also were used by several agencies to evaluate outcomes (Figure 6). The survey asked agency representatives if they estimated revenue impacts after imple- mentation. Answers to this question were impacted by the COVID-19 pandemic, limiting the ability to gather clear data on revenue impacts. Of the 31 agencies that were asked this question, 45% estimated revenue impacts and 26% did not. The remaining five respondents that answered “other” were unable to answer due to COVID-19 pandemic impacts or had not implemented 18% 38% 29% 47% 21% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Pe rc en t of R es po ns es After new fare structure/policies were developed (in draft form) After new fare structure/policies were developed (in final form) Immediately before the fare change, i.e., Public hearing At the planning stage Other Figure 4. Involvement of the general public (n = 34 responses).

22 Fare Capping: Balancing Revenue and Equity Impacts 94% 69% 66% 66% 59% 6% 16% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Branding and promotional materials Instructional video Promotional materials developed for multiple languages Paid media Travel training Did not promote Other Pe rc en t of R es po ns es 45% 45% 42% 35% 35% 29% 23% 0% 10% 20% 30% 40% 50% Total passenger trips Operational data Trips per passenger Rider Surveys Farebox recovery Other financial data Equity Metrics Pe rc en t of R es po ns es Figure 5. Fare capping promotion (n = 32 responses). Figure 6. Data used to evaluate fare capping impacts (n = 26 responses).

Transit Agency Survey 23   fare capping long enough to gather sufficient data to answer the question. In the comments, one agency estimated revenue losses of 1% to 3% and another estimated 7% to 8%. Agencies were asked to reflect on a series of statements about fare capping impacts. Many agencies were neutral or selected not applicable (N/A). A majority (55%) of agencies strongly or somewhat agreed that the use of mobile ticketing or other technology has increased with the implementation of fare capping, and 48% of agencies somewhat or strongly agreed that there was a more positive image of transit in their communities (Figure 7). No agency disagreed with either statement. Several respondents agreed that fare capping impacts include fewer fare box issues and less cash collection, with a few respondents who disagreed. Although there was not a clear, strong response, agencies indicated a slight disagreement with the statement that fare capping increased ridership and higher disagreement that it increased revenue. Agencies were almost entirely neutral on the impacts of fare capping on off-peak ridership. Agencies were asked what challenges they experienced with fare capping. Although concerns about loss of fare revenue were perceived as a challenge, no agency indicated resistance from their leadership or board of directors. The challenge that most agencies experienced was educating and transitioning riders, followed by increased operational costs and concerns about loss of revenue and privacy (Figure 8). Cost, Technology, and Innovation The cost to study and implement fare capping varied due to many factors, including the size of the agency and the scope of their program. Investments ranged from a mobile app to full scale fare box replacement and new software to manage an account-based fare system. Capital costs ranged from $20,000 to $30 million for the 42% of agencies that responded to the question. Ten percent of agencies reported that costs for studying fare capping ranged from $100,000 to $125,000. Annual fee and operations costs ranged from $22,000 per year to $1.4 million for the 23% of agencies who responded to the question. The types of technology and other investments needed to implement fare capping are shown in Figure 9. New fare media such as smart cards and a mobile app had the highest responses with most agencies investing in one or both. 0% 20% 40% 60% 80% 100% increased use of mobile ticketing or other technology a more positive marketing/image of transit fewer farebox issues less cash collection increased ridership increased revenue increased ridership during off-peak Since implementation, my agency has experienced... Strongly agree Somewhat agree Neutral Somewhat disagree Strongly disagree N/A Figure 7. Estimated fare capping impacts (n = 27 responses).

24 Fare Capping: Balancing Revenue and Equity Impacts 42% 32% 29% 29% 6% 0% 0% 0% 10% 20% 30% 40% 50% Challenges educating and transitioning riders Increased operational costs (e.g., third party fees) Concern about loss of fare revenue Concerns about privacy Rider opposition to fare policy changes Agency leadership resistance Board of directors resistance Pe rc en t of R es po ns es 26% 32% 35% 45% 55% 55% 61% 65% 0% 10% 20% 30% 40% 50% 60% 70% Ticket vending machines Upgrades to fleet or passenger facilities (e.g., cellular or wireless connectivity) Farebox upgrades Expanded retail network Website enhancements for e-purchases Back-of-office accounting software or fare collection system software Mobile app New fare media (e.g., smart cards) Percent of Responses Figure 8. Challenges to implementing fare capping (n = 26 responses). Figure 9. Investments made to support fare capping implementation (n = 27 responses).

Transit Agency Survey 25   Changes to Pass Structure and Pricing This section discusses changes made to transit pass structure and pricing. Fare capping is often implemented as a part of a larger project such as bus rapid transit, a fare restructuring effort, or mobile payments. When asked about changes to their fare products before and after fare capping, few agencies eliminated cash after implementing fare capping, but a handful eliminated paper or magnetic stripe tickets. A majority of agencies who responded to the question added a mobile fare payment app and smart cards after implementing fare capping. As part of their fare capping program, some agencies changed the price of their fare products, a few discontinued their weekly pass, and even fewer discontinued their day pass. The information technology infrastructure that enables fare capping also allows changes to fare product distribution. A majority of respondents added monthly autoload and reload after or in conjunction with fare capping. The experience is not universal, however, as several agencies continue to offer neither. Only one agency discontinued a ticket vending machine, and no other fare sale or distribution options were removed.